The Washington Post has two related stories today about the U.S. farm program and its ruinous effects on taxpayers and other sectors of the economy. On page A1, the Post reports that since 2000 the U.S. government has paid $1.3 billion in farm subsidies to landowners who don’t even farm. Our farm program is structured so that landowners whose acres have historically been used for farming are eligible for large payments whether or not they continue to produce anything. Congress introduced these payments in 1996 in order to discourage the overproduction that traditionally accompanies massive subsidization. Instead, it created a class of wealthy, non-farming welfare recipients.
The second, related story is about the collapse of the Doha round of World Trade Organization negotiations. The Doha round was supposed to achieve new breakthroughs in the liberalization of trade in agricultural goods, industrial goods and services. But as the Post reports on page A18, the Doha round is stalled indefinitely because the U.S. and the EU have stubbornly refused to offer the kind of farm-subsidy reductions that large developing countries like India and Brazil have demanded as a precondition for opening their markets to industrial goods and services.
Just to put this in perspective, the non-farming sectors of the U.S. economy make up between 80 to 90 percent of the GDP. Yet through its actions, the U.S. government is saying that it is willing to forgo new market openings for its most productive sectors so that wealthy landowners can continue to receive lots of money not to farm.